Good government could start by removing the RET barnacle

Of all the mounting layers of barnacles slowing the Australian ship of state, the Renewable Energy Target ought to be one of the easiest to scrape off. The Warburton review was sprung on an unsuspecting industry and the subsequent stand-off has left it in a state of inanimate suspension. It’s hard to see what is driving the government’s approach to this issue. There are no direct budget implications. The Warburton review’s own modelling, not to mention the modelling of other industry experts including IES, point to the RET delivering lower retail electricity prices, so the consumer benefits from the RET. Many media commentators misunderstand this point. To be sure, profit margins of existing generators have been and will be less than otherwise if the RET remains. The negotiation is stalled at a number somewhere between the high thirties and low thirties of thousands of GWh. Other concessions to soften the impact of the target have been made, so the points of difference between the parties are hardly wide. A quick decision on the RET, one way or the other, will allow the electricity industry as a whole to move on with confidence.

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